The 2026 Non-Compete Tracker: State by State

A non-compete agreement is a contract clause that bars an employee from working for a competitor, or starting a competing business, for some period of time after leaving a job. In theory, it protects employer investment in training, trade secrets, and client relationships. In practice, the Federal Trade Commission estimated in 2023 that roughly 1 in 5 U.S. workers — about 30 million people — is bound by one. That number includes fast-food workers, hair stylists, warehouse staff, and entry-level employees who arguably have no “protectable interest” to begin with.

The legal landscape has moved faster between 2023 and 2026 than at any point in U.S. employment law history. A short timeline:

The result for small businesses: there is no federal answer. Whether a clause is enforceable depends entirely on the law of the state where the employee works — and, in some scenarios, where they want to work next. A non-compete that’s airtight in Texas may be void next door in Oklahoma. The same template language can mean a $50,000 court fight in one state and a polite refusal-to-enforce letter in another.

This guide gives you the answer for every U.S. state and DC, with the citations to back it up.

We graded every U.S. state and the District of Columbia on a 0–100 Enforceability Strictness Score. A higher score means it is harder for an employer to enforce a non-compete — friendlier to the worker leaving for a competitor. The score combines six factors, each weighted by its real-world impact on whether a non-compete actually sticks in court.

California, Minnesota, North Dakota, and Oklahoma all ban employee non-competes outright — yet California scores 95 while North Dakota scores 78. That gap isn’t a mistake. California’s 2024 amendments (SB 699 and AB 1076) added affirmative employer obligations: proactive written notice to current and former employees that their non-competes are void, statutory damages, and attorney’s fees for workers who win challenges. North Dakota’s ban (Century Code § 9-08-06, on the books since 1865) is older and purely defensive: the clause is void, but a worker who wants to push back on an attempted enforcement is on their own.

Both states are functionally “you can’t enforce it.” One is just better-armed for the worker. We chose to reward worker-side recourse rather than collapse all full-ban states to the same number, because the practical difference matters — in California a former employer who threatens enforcement risks paying the worker’s lawyer, while in North Dakota that same threat costs the worker time and legal fees to defend, even though the underlying clause is just as void.

Every score in this guide is paired with primary citations — statute, case, or recent bill text — in the state-by-state table. If you spot something off, we want to hear about it.

The 2024 FTC rule that would have voided an estimated 30 million non-compete agreements nationwide remains enjoined. After the Fifth Circuit upheld the lower court’s block in 2025, the FTC under its current chair has not pursued further appeal and has publicly indicated it will not continue to defend the rule. Barring new legislation from Congress or a future administration’s policy reversal, federal preemption is off the table. Non-compete law is, and will remain, state law.

That makes the state-by-state question more important, not less. Small employers can’t plan around a federal rule that isn’t coming, and workers can’t rely on one either.

Since the FTC ban dropped, at least 14 jurisdictions have moved to restrict non-competes — almost all in the more restrictive direction. The headline 2025–2026 changes:

Florida (Statute 542.335) and Texas (Business & Commerce Code § 15.50) remain the friendliest jurisdictions in the country for employers seeking to enforce non-competes. Both presume “reasonable” non-competes enforceable; Florida specifically forbids courts from weighing “harm to the employee” in the enforceability analysis. New York attempted statewide bans in 2023 and again in 2024; both efforts were vetoed or stalled in the legislature. Georgia and North Carolina remain employer-leaning under their existing statutory and case-law frameworks.

Even within permissive states, courts handle overreach very differently — and this matters more for small employers than the headline strictness score does. Some states “blue-pencil”: if a non-compete is too broad in geography, duration, or scope, the court rewrites it to a reasonable level and enforces the trimmed-down version (Florida, Texas, most Southern states). Others apply “strict construction”: if any element overreaches, the whole clause is void (Virginia historically, Nebraska, Wisconsin, and a growing list).

For small employers drafting their own agreements without legal review, this is the single most important distinction. In a blue-pencil state, aggressive drafting carries no penalty — the worst case is that a court trims your 5-year nationwide non-compete to 1 year within 25 miles. In a strict-construction state, that same overreach makes the entire clause unenforceable, and a worker who knows it can simply ignore you.

What follows is the state-by-state breakdown, starting with the strictest jurisdictions and working toward the most permissive.

Below is a card for every U.S. state plus the District of Columbia. Each card shows the state’s enforceability strictness score (0–100), the controlling statute, the income threshold or duration cap if one applies, and a short summary of what the non-compete law actually does. Cards are tagged in one of three ways: Banned (non-competes void by statute), Threshold ban (void below a wage or occupation threshold), or Reasonableness (enforceable if the agreement meets a multi-factor test in court).

If you want the shortcut before scrolling: among non-compete states, the eight most likely to void an agreement are California, Minnesota, Washington, North Dakota, Colorado, Montana, Oklahoma, and Oregon. The two states most likely to enforce a non-compete agreement are Florida and Texas. Everywhere else, the rules for a non-compete agreement by state turn on the specifics.

The cards above are the per-state reference. The next section steps back and looks at the patterns — why some states are converging on full bans, where the income-threshold model is heading, and what the persistent enforcement states look like in 2026.

Five years ago you could describe U.S. non-compete law on a single line: three states banned them outright, and everywhere else courts applied a reasonableness test. Since 2023, that simple story has fractured into four distinct regimes that are diverging faster every legislative session. Understanding which regime your state belongs to matters more than memorizing any single state’s rules.

Five states currently treat virtually all employee non-competes as void: California, Minnesota, North Dakota, Oklahoma, and Montana. If you’re looking for which states have made non-competes illegal, this is the list. Each got there by a different route — California and North Dakota have had statutes on the books since the 1800s; Oklahoma and Montana followed in the late 19th century. Minnesota only joined in 2023, with a sweeping new statute that bans every employment non-compete signed after July 1, 2023 — no executive carve-out, no income threshold, no exceptions for “key employees.”

Washington will become the sixth member of this club on June 30, 2027, when Engrossed Substitute HB 1155 takes effect. The bill’s signing in March 2026 signals where the policy debate is heading: even states that already had income-threshold regimes are converging toward outright bans. Wyoming’s 2025 statute (SF 107) takes a similar approach for most labor, with narrow carve-outs for executives and equity holders.

What these states have in common isn’t ideology — they span the political spectrum from California to Oklahoma. It’s a shared administrative judgment: the cost of figuring out which non-competes are “reasonable” case-by-case outweighs the value of enforcing them at all.

A second wave of states permits non-competes, but only for high earners. The basic mechanism: the legislature sets a salary floor, and any non-compete imposed on a worker below that floor is automatically void. The floors typically index annually to CPI or state wage data. The 2026 numbers, roughly:

The income-threshold approach has appealed to legislatures across the political spectrum because it preserves enforceability for executives where employers can plausibly claim a protectable interest, while ending the practice of imposing non-competes on warehouse staff, fast-food workers, and hourly retail employees — a category the FTC documented as widespread abuse in its 2024 rulemaking record.

A third pattern that emerged in 2024–2025 cuts across state political lines: industry-specific bans on healthcare-employment non-competes. Pennsylvania, Maryland, Rhode Island, Indiana, Iowa, and a growing list have enacted statutes voiding non-competes for physicians, nurse practitioners, dentists, and other licensed clinicians. The argument is patient access — when a doctor leaves a hospital system, patients lose their established provider if the doctor can’t practice locally.

Pennsylvania’s 2024 Fair Contracting for Health Care Practitioners Act is the most aggressive of these statutes; Maryland’s 2024 expansion added veterinary practitioners to its existing ban. Expect more states to follow in 2026–2027 sessions: the public-health framing is bipartisan-friendly in a way that broader non-compete reform isn’t, and the medical lobby (AMA in particular) has prioritized the issue at state level since 2023.

The final pattern is the absence of one. Florida, Texas, Georgia, and North Carolina remain firmly enforcement-friendly. Florida is the most aggressive: Statute 542.335 specifically forbids courts from weighing “harm to the employee” in the enforceability analysis. That makes Florida the only state where a court is legally barred from considering whether enforcing the non-compete will leave the worker unable to support their family.

Texas’s regime (Business & Commerce Code § 15.50) is more nuanced — it requires a “legitimate business interest” and reasonable scope — but the Texas Supreme Court has consistently sided with employers when those terms come into question. New York attempted statewide bans in 2023 and 2024; both efforts failed in the legislature, leaving NY in the persistent-enforcement camp despite political signals to the contrary. Georgia and North Carolina round out the southern enforcement bloc, each with statutory schemes that explicitly permit “blue-pencil” judicial rewriting of overreaching clauses.

For a small employer trying to draft a single template that works across the country, this fragmentation is the central problem. A clause that would survive in Florida — six months, statewide, broad customer non-solicit — will be void on arrival in California and may trigger a $5,000 statutory penalty in Colorado. There is no longer such a thing as a “standard” U.S. non-compete.

The most common question we get from small business owners isn’t “is my non-compete enforceable?” It’s “I have employees in three states; which law governs?” The answer depends on three factors, in descending order of importance.

In most jurisdictions, the controlling law is the state where the employee performs the work — not the state where the employment contract was signed or where the employer is headquartered. A remote employee living in California and clocking into a New York-based startup is governed by California law, even if the offer letter recites “this agreement is governed by New York.”

Two states explicitly codify this rule: California (SB 699, effective January 2024) and Minnesota (Minn. Stat. § 181.988). Both statutes void out-of-state choice-of-law clauses designed to circumvent local protections. If you’re a New York employer hiring a remote California worker and pasting in a New York choice-of-law clause, the California courts will simply ignore it — and a worker who wins the resulting fight can recover attorney’s fees.

A complication: when a worker leaves and joins a competitor in a different state, courts in the new state may apply their own law to the non-compete fight. This is how California ended up as the country’s “non-compete graveyard” — workers who relocate to California with an out-of-state non-compete can file declaratory judgment actions to have the agreement voided, and California courts routinely grant them.

The 2024 California amendments codified this practice. A non-compete signed in Texas, governed by Texas law, becomes void the moment the worker becomes a California resident performing services in the state — and the worker can sue the former Texas employer for attorney’s fees in the resulting litigation.

Choice-of-law clauses still matter for the gray-zone states (everyone other than California and Minnesota). If your employee works in Pennsylvania and your contract picks New York law, a Pennsylvania court will probably apply Pennsylvania’s reasonableness test rather than New York’s — but it’s a fact-specific call. The classic factors: (1) does the chosen state have a substantial relationship to the parties or the transaction; and (2) does the chosen state’s law violate a fundamental policy of the state with greater interest in the dispute?

If you’re a small business owner in one of the 30+ states that still enforce non-competes, the question isn’t whether you can use one — it’s how to draft one that will actually hold up. Six elements distinguish a defensible 2026 non-compete from one a court will void on first review.

Every enforcement state’s case law requires that the non-compete protect a “legitimate business interest” — typically trade secrets, confidential customer information, specialized training investment, or substantial customer goodwill. Courts in 2026 increasingly demand specificity. “We trained you” isn’t enough; “we invested $40,000 in your CompTIA Security+ certification and gave you access to our proprietary client risk-scoring methodology” is the kind of articulated interest that holds up.

If you can’t write down in plain English what specific competitive harm you’re worried about, the non-compete won’t survive challenge.

Courts in 2026 are unsympathetic to nationwide non-competes for non-executive workers. The defensible default for a small business: the geographic area where your customers actually live, plus a reasonable buffer. For a regional service business, that’s typically the metropolitan area or 25–50 miles. For an online-only business, geographic scope is harder to justify — and courts are increasingly voiding it entirely.

The defensible default is six months to one year. Two-year non-competes are still common in template language but increasingly trimmed or voided. The jurisdictions that routinely uphold longer durations (Florida, parts of the Southeast) do so only for executives or sales personnel with substantial customer relationships.

Oregon caps duration at 12 months by statute. Washington caps at 18 months. Massachusetts requires garden-leave pay for any restriction extending past 12 months. Drafting to a 12-month default is reliable; anything longer needs state-specific justification.

In several states, continued at-will employment is insufficient consideration for a non-compete signed mid-employment. Illinois (Reliable Fire Equipment v. Arredondo, 2011) and Pennsylvania (Socko v. Mid-Atlantic Systems, 2015) are the strictest on this point. The fix: pay something for the signature. A small signing bonus ($500 to a few thousand dollars), a promotion accompanied by the new agreement, or a discrete piece of training the employee couldn’t otherwise access — anything that lets the employer point to specific value exchanged.

Several states — Oregon, Illinois, Colorado, Washington — require advance written notice before the worker signs. Two weeks is the most common minimum. The notice must be in the offer letter or delivered as a separate document; folding the non-compete into the employee handbook on day one doesn’t count.

This is the trip-wire most small employers don’t realize they’ve crossed. A handshake offer on Monday and a non-compete handed over with the I-9 paperwork on Wednesday is void in Oregon — even for a $200,000-a-year executive — because the worker didn’t get 14 days to review.

In many small-business situations, a non-compete isn’t actually the right tool. Three alternatives that cover most legitimate employer needs:

An AI document-review tool like Loio can flag duration and scope overreaches in your template language before you send it out, and surface the consideration and notice issues that void agreements even when the substantive terms are fine. And with Loio's eSignature feature you can safely sign documents or request signatures regardless of your location.